The 3PL contract cycle can be managed just like any other outsourced services procurement, and has four distinct segments that we will call the four S: Source, Solicit, Select, and Secure. Proper execution of each segment is essential to developing and maintaining successful 3PL relationships.

1. For-Hire Logistics and
Transportation Services:
How Do You Bring Purchasing Skills to the Process of
Purchasing Transportation and Logistics
28th WERC Annual Conference
by
Thomas L. Tanel, CTL, C.P.M., CCA
2nd Vice Chair, ISM Logistics & Transportation Group
and
President and CEO, CATTAN Services Group, Inc
Copyright 2005 CATTAN Services Group, Inc.

2. How Do You Bring Purchasing Skills to the
Process of Purchasing Transportation and
Logistics
 Purchasing Transportation and Logistics is
just like purchasing any type of service
 Good Purchasing skills and procurement
process are applicable as well
 Understanding price versus cost is
applicable as well
 As Dizzy Dean, the great Baseball Legend
once said, “If you can do it, it ain’t
braggin!”
Copyright 2005 CATTAN Services Group, Inc.

3. The Four S’s
Source
Solicit
Select
Secure
Copyright 2005 CATTAN Services Group, Inc.

4. The Four S’s: Source
 Identify Logistics and Transportation
requirements:
Review and clarify req’mts
Obtain feedback on 3PLs and carriers
Review KPIs and analyze gaps
Establish which gaps are most critical
Copyright 2005 CATTAN Services Group, Inc.

5. The Four S’s: Source
 Gather data and manipulate information:
Compile or obtain 6-12 months of
history/activity req’mts
Obtain details: inbound and outbound;
origins and destinations; weight, cube
and # of pieces; traffic lanes, supply
chain streams, and demand chain
streams; types of equipment; volatility
and performance req’mts
Copyright 2005 CATTAN Services Group, Inc.

6. The Four S’s: Source
 Create a RFI:
Review 3PLs’ and carriers’ company
and public profiles
Invite both current and new sources
Get: completed profile questionnaires,
financials, insurance and safety
certificates, authority or operating
documents, and references
Copyright 2005 CATTAN Services Group, Inc.

7. The Four S’s: Solicit
 Develop a RFB/RFP:
Decide which 3PLs and carriers receive
solicitation based on RFI results
Determine your preferred pricing and
contract formats
Specify whether bid/proposal by lane
allocation, region or complete scope
Include TCA/NITL Voluntary Guidelines
to Good Business Relations
Copyright 2005 CATTAN Services Group, Inc.

8. The Four S’s: Solicit
 Send bid/proposal package to qualified sources:
Prepare a template with details of info
gathered
Provide clear instructions concerning info you
want included
Attach a copy of anticipated contract and
T&Cs upfront
Provide sample performance reports to be
used as measures of agreed performance
Establish what is a responsive bid/proposal
and adequate submission date
Copyright 2005 CATTAN Services Group, Inc.

9. The Four S’s: Solicit
 Hold a Pre-Bid/Proposal Conference:
Invite qualified bidders/proposers
Discuss expectations
Hold Q&A
Provide feedback and answers to all
Copyright 2005 CATTAN Services Group, Inc.

10. The Four S’s: Select
 Verify documentation submitted
 Establish T&Cs that may require
adjustment, compromise or negotiation
 Analyze bid or proposal submissions
 Develop selection criteria or negotiation
strategy
 Select or conduct negotiation
Copyright 2005 CATTAN Services Group, Inc.

11. The Four S’s: Secure
 Provide contracts to selected 3PLs and/or
carriers
 Emphasize L ong T erm R elationship
 Monitor 3PLs’ and/or carriers’ performance,
costs and commitments
 Seek continuous improvement and
incorporate feedback to and from
 Hold IPRs and provide a performance
report card on a regular interval
Copyright 2005 CATTAN Services Group, Inc.